Amazon’s decisions to raise the fulfillment fees for third party sellers during the holiday shopping period is happening due to their increased costs. This change will impact from 2022 October to January 14 and if you are a third-party seller who uses the Fulfillment by Amazon as a service you will have to pay 35 cents per item being sold in the United States of America or Canada. Specialty is it is the very first time that Amazon increased their seller fees for the holidays.
This situation creates an additional challenge for both intermediary level sellers to large scale sellers who are currently using Amazon FBA for fulfillment services. With the increased costs and standard awaiting times sellers are getting to see contracted profit margins and inconveniences in operation.
Since the holiday fees are coming on top of the existing charges that sellers are paying for using FBA services some sellers have extended concerns over long term use of amazon FBA as a fulfillment services provider.
Few smarter ways to handle the increased number of Fulfillment fees are to;
If your product is a product that is below $20, it might incur a substantial charge for storage and packaging during the FBA.
As a drop shipper if you are searching for new product categories one important thing which you could do is to identifying your product categories. If you pay close attention, you will be able to save your profit margins by not falling in to product categories which might include raised fees. Back in the day in 2018, when Amazon increased their apparel fees, many drop shipping businesses who were selling apparel had to reassess the pricing method and the FBA charges which are being paid for the fulfillment services, when re-pricing the products that they were selling.
As an Amazon seller you are provided with Inventory Performance Dashboard to keep track of your items and the relevant fees which are incurred. The Inventory Performance Dashboard can be found inside your Amazon Seller central Account. While this dashboard allows you monitoring your inventory activities, you can receive advice & suggestions on how you can streamline / optimize things to make better use of your inventory & its management.
You may already know that Amazon FBA calculates the fulfillment fee for each item that you want to store, a smart way to reduce your cost is to pack your low-cost items together and sell them as a single combined unit. Selling such items in packs such as pack of 02 mugs. Pack of 4 door stoppers helps you by only costing FBA fees of one item. This is a smart trick to avoid increasing product fees on FBA.
If you are selling 50 items, you are required to pay FBA charges for 50 items. But if you bundle 5 products at a time you will pay 10 FBA charges only. And if it happens to be listed on Amazon too, you would generate more sales with bundled offers.
Furthermore, if you consider better cash flow to support your inventory, feel free to connect with nFinance to learn how you can obtain invoice factoring for your eCommerce invoices. This way you will be able to get paid up to 70% of your invoice value the next day.
We at nFinance provide invoice financing so that you can buy goods from your suppliers more quickly and expand your business smoothly. Instead of waiting 14 days for Amazon to pay you, nFinance pays up to 70% of the gross invoice value, starting from the date of sale on your Amazon marketplace.
Best news is we are not limited to Amazon, we also support Walmart, The Home Depot, Wayfair, Macy’s Houzz too. Get funded with invoice factoring from nFinance. As an e-Commerce Seller you get paid faster for you invoices.
For registrations, write to info[at]nfinance.io